"Hannan masterminded the attack while three members of his group carried out the grenade attack on [the] British ambassador," Rahman, who led the investigation, said.
"They carried out the attack to avenge the deaths of Muslims in Iraq and across the world by America and Britain."
The Bangladeshi-born diplomat, who moved to Britain as a child, was on his first return visit to his home district of Sylhet after taking up his appointment in May 2004.
A special police investigation team in September 2006 arrested Mohammed Shahedul Alam and Mohammed Delwar Hossen of Harkat-ul Jihad, who confessed to carrying out the attack on the orders of Hannan, Rahman said.
Hannan, a veteran of the fighting against the Soviet occupation of Afghanistan in the 1980s, had been arrested earlier in connection with an alleged role in a plot to blow up Sheikh Hasina Wajed, the former prime minister, in 2000.
Muslim-majority Bangladesh was rocked by a string of deadly blasts in 2005 that authorities said were part of a campaign to impose Islamic law.
At least 28 people, including four suicide bombers, died in the blasts, blamed on a separate Muslim group, Jamayetul Mujahideen Bangladesh (JMB).
Six senior JMB figures were executed in April for their part in some of the 2005 bombings.